Fears grow over pace of reform as China ushers in new leaders

Workers clean windows at the Great Hall of the People ahead of the 18th National Congress in Beijing on November 2 2012. (AP)

China's incoming leaders face a growing clamour for reform as the days count down to the country's once-a-decade power transition, with demands for changes across the policy spectrum: from reining in the vast state-owned enterprises to increasing the accountability of cadres.

"Economic and political reforms must go together," urged an editorial in the influential magazine Caixin last week. "Too often, the heavy hand of government in the market and the dominance of state monopolies stifle competition, distort the market and allow rent-seeking and corruption to thrive.

"Abuses of power have wreaked havoc in society, causing political divisions, the income gap to widen and animosity between government and people.
The polarisation and fragmentation in society is deeply worrying ... If reformers don't check the abuse of power and push for political reform, China could easily lose the gains it has made."

Many saw the current leaders as potential reformers when they took office. Now, however, they are accused of missing opportunities and maintaining the status quo.

"Deng Xiaoping had a famous saying about how reform should go: 'Crossing the river by feeling the stones'," said Gao Wenqian, previously an official researcher and now a senior policy adviser at the New York-based Human Rights in China, who says that he is sceptical that any significant changes will actually materialise. "The present situation is 'feeling the stones, but not crossing the river'."

"The effervescence of the debate in recent weeks over reform and the Chinese Communist party's future is consistent with the atmosphere that always precedes a leadership turnover," noted Christopher Johnson of the US thinktank the Centre for Strategic and International Studies.

The handover process begins on Thursday, when delegates gather for the 18th party congress in Beijing. A week or so later, the new politburo standing committee—the country's top political body—will be unveiled.

Xi Jinping is Hu Jintao's designated successor as China's leader. It is assumed that Li Keqiang will replace Wen Jiabao as prime minister, but the full composition of the standing committee remains uncertain. It is expected to shrink from nine to seven members, which should make decision-making easier in the consensus-based system and, potentially, pave the way to bolder moves.

The latest indications, however, suggest that figures who are thought to be more open to reform—such as Li Yuanchao, head of the powerful Organisation Department, and the Guangdong party secretary Wang Yang—have not been selected, though some believe Li may squeeze in.

Rethinking policy

Optimists say that a younger generation of leaders may be more willing to rethink policy. They have more experience of the outside world; they have studied subjects such as law rather than engineering; and Xi has the confidence that comes of being born into a powerful communist family.

Reformers are also buoyed by a recent meeting between Xi and Hu Deping, an influential liberal figure, and the fact that thinktanks have been drawing up proposals for overhauling the economy. They argue that problems such as corruption and state inefficiency have accumulated and become more obvious over the last decade.

"In the past, the high speed of economic growth could ease the problems. China's pace of economic development has declined right now, and it has exposed the social problems," said Gao.

Others say that meetings and proposal requests commit Xi to nothing, and that any plans he develops will require the agreement of colleagues and party elders. In particular, the sceptics insist, any political reforms that do occur are likely to be minor, most likely in the form of fresh attempts to explore "intra-party democracy".

That, argues Jeremy Paltiel, an expert on the Communist party at Carleton University in Canada, is simply a contradiction. "The party cannot be an organisation of executives who are subject to a single discipline and at the same time a deliberative assembly of people free to present their opinions and pursue their interests," he said.

"If the discipline were to be relaxed, the party would cease to function as the backbone of the state and lower levels could no longer be relied upon to follow the will of the centre."

Neither are economic reforms straightforward. Ideological opposition may have faded—these days, elders such as former president and prime minister Jiang Zemin and Zhu Rongji have their own record of reform—but in its place are powerful vested interests. Economic and political power are more closely wed than ever.

Another powerful deterrent is the lesson the elite has drawn from the Soviet Union—that it would be most vulnerable at the moment of reform. Only a crisis, many think, could prompt major change. But in the end, argued the Beijing-based scholar Deng Yuwen, the future course of China must be down to its people. "Whether reform can happen depends on society, not the leaders," he said.